Published 12:02 am, Thursday, April 14, 2011

The city, which spends roughly $20 million annually on power, negotiated with the LCRA for six years before reaching an impasse, City Manager Doug Faseler said.

It then put out a new request for proposals, garnering 27 from 11 electricity providers. CPS offered the best deal, Faseler said, with a 7.5-year contract to provide power to the city's roughly 8,000 electricity customers.

“We think we avoided some higher costs,” Faseler said.

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CPS spokeswoman Lisa Lewis said the utility will be selling excess power because its capacity is more than what is needed for local customers.

And while the contract won't affect rates directly, in the long run such wholesale power contracts help offset what retail customers pay, she said.

Neither CPS nor Seguin officials would detail the financial terms of the contract, which will begin in 2016. Seguin has an option to extend its deal with CPS for three years after the initial contract.

The utility also agreed that at least 10 percent of the power will come from renewable sources like wind and solar energy, Faseler said.

Currently, just 2 percent to 3 percent of the power the city gets from the LCRA comes from renewables, he said.

The city of Georgetown also recently moved to end its relationship with the LCRA, according to the Austin Business Journal. City officials there decided in February not to renew its $42 million contract after nearly five decades with the power provider, according to the Journal.

Other neighboring communities also have put out requests for new power contracts, Lewis said, and CPS is in discussions with several.